Immersed in music ... the Raploch children in class. Photograph: Murdo Macleod/Guardian

The Raploch estate lies between Stirling Castle and a monument to William Wallace. On a sunny winter afternoon, snow glints on the Ochil Hills beyond. It is a scenic spot - with little to suggest that Raploch is one of the most deprived places in Britain. The average income here is £6,240. Only four kids out of every 100 make it to higher education. Nearly a quarter of the 5,000 or so inhabitants of this mixture of 1930s and 50s terraces can expect to suffer from heart disease, stroke, or cancer. Domestic violence is common. Alcohol and drug abuse are rife.

Yet things are changing. I last visited Raploch in the summer of 2006, and since then there has been a mushrooming of new buildings: a smart "community campus" housing three schools. This is one of the first signs of its regeneration: in 2004, the Scottish Executive marked the area down as in need of help - and a £120m master-plan was drawn up. Better housing, healthcare, job prospects and education are promised. There was even talk of ditching the estate's name, with its negative associations - an idea rejected by a proud community.

But physical regeneration is just the start. There is also music. Since last summer, 200 local children have been receiving the concentrated attention of six enthusiastic music teachers. Of these, 40 children aged six to eight attend after-school clubs three times a week, where they receive tuition on the violin, viola, cello or double bass; younger children are taught during the school day.

On the day I visit, the children are preparing for a concert, learning an "open-string samba". They are restless, at times unfocused - but, in a surprisingly disciplined way, they are making music, as a group. They hold their instruments with pride. Some look like, well, musicians. Coral Stewart, an eight-year-old cellist, says at the end of the session: "It's good. I want to keep playing the cello. I want to play in an orchestra." Her mother, Mary, says of Raploch: "This is not a nice place. It's drugs and drink. Until now, there's been nothing for kids." Does she worry for them? "Yes. They grow up too young."

The aim here is to replicate a highly successful, 30-year-old scheme from Venezuela, known as the Sistema. In Venezuela, the project has changed the lives of thousands of children from the barrios by immersing them, every day of their lives, in classical music. A quarter of a million children are now in the Sistema. Although primarily aiming to instil discipline and comradeship - with the orchestra as both its instrument and guiding metaphor - the Sistema has also produced some of the most exciting young musicians working today, among them the 27-year-old conductor Gustavo Dudamel, music director elect of the Los Angeles Philharmonic, and Edicson Ruiz, the bassist who, at 17, became the youngest ever member of the Berlin Philharmonic. According to Simon Rattle, "There is nothing more important in the world of music than what is happening in Venezuela."

It was for its powers of social transformation, however, that the Sistema caught the eye of Richard Holloway, chair of Scottish Arts Council and the radical former Bishop of Edinburgh. It has also attracted the attention of musicians in England - Julian Lloyd Webber is launching a similar scheme, starting with three groups based in London, West Everton and Norwich. (To declare an interest in the Scottish project: in 2005, I interviewed Dudamel, then little known, as he made his Proms debut. A few days later, I interviewed Holloway, and told him about Dudamel and the Sistema. Holloway took himself off to Caracas to investigate. I'm by no means claiming credit, but I may have planted the seed of someone else's idea.)

Holloway has always felt strongly about Scotland's social problems, having worked as a curate in the Gorbals, and been brought up in Possilpark, another deprived area of Glasgow: "The deep background to all this has been a long awareness that there is another Scotland," he says. "No one's happy about it, but government policy doesn't dent the problems. You tipped me off about Venezuela, and it pinged into my head that this might be part of a solution - the kind of slow-burning, generational change that I believe is needed."

Holloway's proposal coincided with the regeneration plans mooted for Raploch. With a grant from the Scottish Arts Council, he set about establishing what is now called Sistema Scotland, appointing as its director 29-year-old Nicola Killean, a graduate of the Royal Scottish Academy of Music and Drama.

Sistema Scotland has its critics, and they have focused on two points: first, that the nation already has its own, successful music education system; and second, that importing a scheme based on the social and economic particularities of Venezuela could either be simply ineffective in Scotland, or require so much adaptation to local circumstances as to fatally dilute it.

The Sistema in its Venezuelan form is embedded in a very Latin American tradition of radical social action, tinged with a passionate Catholicism. It relies on complete immersion: children devote every day after school, as well as weekends, to learning instruments - they are thus kept off the streets and out of bullets' way. But, argues Holloway, "The Sistema can be made to work anywhere. The kids are different, but they have the same need for love and a capacity for joy. We have encountered scepticism and cynicism. It is a gimmicky scheme, some people think. What I say is this, there are wonderful things going on in the youth orchestra scene here in Scotland - but not many of the kids come from places like Raploch."

One of Killean's first jobs was to appoint the music teachers, part of whose task has been to turn European music-teaching methods on their head. In north American and Europe, the focus tends to be on individual tuition and practice. In Venezuela, the idea is always communal: children are taught through playing together in orchestras, right from the beginning. Older kids teach younger ones; Dudamel was already conducting as a young teenager.

But first the team set about getting Raploch onside - by steeping the neighbourhood in music. Throughout last summer, the teachers played churches, chapels, parties, bingo nights and even McDonald's. Finally, there was the launch of the Raploch children's string orchestra, with kids performing alongside players from the BBC Scottish Symphony Orchestra. "We gave each child [player] two tickets and held our breath," says Killean. "But it was absolutely full. There was a standing ovation, an amazing buzz."

After intensive training sessions held over the summer holidays, the teaching fell into a regular, term-time pattern. "There is a particular challenge of getting to children who lack a support network at home," says Killean. "One of my bugbears is offering opportunities and then children not being able to take them up through lack of support. We work with social workers, we make home visits. We send text-message reminders to parents who have different sleep patterns because of drug use. It's not OK just to say someone hasn't turned up. We want to know why." Half the children in the Raploch scheme have some involvement with social services. "We can't fix the problems," Killean says, "but we can equip the child with an alternative community and the skills to grow up and make their own choices - and, I hope, be whatever they want to be."

Robin Panter is one of the teachers here, a 30-year-old viola player who was born in Liverpool and trained at the Royal Northern College of Music. After playing with the BBC Scottish Symphony Orchestra for four years, he has taken a sabbatical to work in Raploch. "It was a wonderful thing to be a part of," he says of working with the BBC orchestra, "but I suppose I was still searching for something I could really take responsibility for." At the beginning, teaching was tough. "There were children who would run around and bounce off the walls. Half or more were finding it uncomfortable even to do things like sit in a circle or clap together. Some didn't want to be in a group at all."

But there has been much progress. "All of us are stunned by how interested the children are and how much they are working together - and how the parents have come on board. People ask: are these the same kids? They walk in a straight line. They have respect for the instruments and each other. It's amazingly powerful." He adds: "I feel personally responsible for them - how you speak to them, what environment you set up, seems so precious to their development. You become part of those children's lives. If that goes well, it's so invigorating."

The parents I speak to are equally positive. Thomas Wallace, father of seven-year-old viola-player Alistair, says: "As long as he's happy, it's great - and he seems to love it." John Fraser, father of cellist John, eight, says: "It's bringing the community together, the kids playing instruments, and there's a lot of good in that."

The potential stumbling block is money. Holloway and Killean want to extend the scheme, and Glasgow is interested. But, says Holloway, "I need another couple of million to guarantee the next five years." It's small beer when put in the context of, say, the £180,000 it costs annually to keep a child who turns to crime in secure accommodation. "I think the government should step up to this," Holloway says. "This is how the country should be thinking. We can't afford not to do this".